New Act Offers 15% Tax Credit for Grocery Stores to Build in 'Food Deserts,' Boosts Mobile Markets

The “Healthy Food Access for All Americans Act” is rolling out a major financial push to tackle food deserts—those areas where people struggle to buy fresh, healthy food because the nearest grocery store is miles away. Essentially, this bill uses tax breaks and grants to incentivize businesses to set up shop and sell groceries in underserved neighborhoods.

The Grocery Store Incentive: Tax Credits for Infrastructure

If you’re a grocery store operator willing to build a new store in a designated food desert, the government is offering a significant tax credit: 15 percent of the cost of new equipment and construction (SEC. 2). If you’re just renovating an existing store to expand the grocery section, that credit drops to 10 percent of the renovation costs. The catch? To qualify as a “qualified grocery store,” at least 35 percent of your annual sales must come from groceries like produce, meat, and dairy. This move is designed to draw serious private investment into areas that typically get overlooked, offering a tangible return on investment for taking on a riskier market.

Defining the ‘Desert’

So, what exactly is a food desert? The bill spells it out clearly (SEC. 2, Defining “Food Desert”). It’s a census tract where a significant number of people—at least 500 or 33 percent of the population—live too far from a grocery store. That distance is defined as over 1 mile in an urban area or over 10 miles in a rural area. Crucially, that area also has to be low-income, meaning it must have a poverty rate of at least 20 percent or meet specific income thresholds. This tight definition means the incentives are highly targeted, focusing on the combination of distance and economic hardship.

Grants for the Front Lines: Food Banks and Mobile Vendors

Beyond the big grocery stores, the bill recognizes that sometimes the solution is smaller and more flexible. It establishes a grant program for non-profits and mobile vendors (SEC. 2). A permanent food bank built in a food desert can receive a grant equal to 15 percent of its construction expenses. For “temporary access merchants”—think mobile markets, pop-up stands, or farmers markets—there’s an annual grant equal to 10 percent of their operational costs. This is a big win for flexibility, acknowledging that mobile vendors are often the fastest way to get fresh food into neighborhoods.

However, there’s a specific limitation for farmers markets: if they already receive funding from most other USDA grant programs, they are ineligible for this new grant. This is likely intended to spread the money around, but it might mean some of the most established and effective farmers markets are left out of this particular funding stream.

The Fine Print: Recapture and Compliance

If a business or organization takes the tax credit or grant for infrastructure, they can’t just pack up and leave a year later. The bill includes a recapture provision (SEC. 2, Recapture and Basis Reduction). If a grocery store or food bank stops meeting the certification requirements within five years of opening, the Secretary can claw back the benefit, meaning the recipient will have to pay back a portion of the tax credit or grant money. Furthermore, if you receive a credit or grant for property, the depreciable value (basis) of that property must be reduced by the amount of the benefit. This is standard tax procedure, but it means that the long-term tax benefits of depreciation are slightly reduced for those who take the immediate credit or grant.

Finally, to keep tabs on where the food access problems actually are, the bill mandates that the USDA update its Food Access Research Atlas at least once every year (SEC. 3). This ensures the data used to identify these food deserts—and thus allocate these funds—stays current, reflecting new retailers as they open.